CVS Health Corp (CVS)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 8,516,000 | 13,807,000 | 7,899,000 | 12,935,000 | 12,655,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 75,560,000 | 76,461,000 | 71,469,000 | 75,075,000 | 69,389,000 |
| Return on total capital | 11.27% | 18.06% | 11.05% | 17.23% | 18.24% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $8,516,000K ÷ ($—K + $75,560,000K)
= 11.27%
To analyze CVS Health Corp's return on total capital over the five-year period from December 31, 2020, to December 31, 2024, we observe fluctuations in the ratio. The return on total capital decreased from 18.24% in 2020 to 17.23% in 2021, indicating a slight decline in the company's efficiency in generating returns from its total capital employed. This was followed by a more significant drop to 11.05% in 2022, suggesting potential challenges or inefficiencies in the utilization of capital during that year.
However, there was a notable recovery in return on total capital in 2023, rising to 18.06%, which could indicate improved operational performance or strategic decisions that enhanced the company's capital utilization efficiency. Nevertheless, in 2024, the ratio declined again to 11.27%, possibly reflecting a reversal in the positive trend from the previous year.
In summary, the return on total capital for CVS Health Corp has shown volatility over the five-year period, with fluctuations that may be indicative of varying levels of efficiency and effectiveness in leveraging the company's capital resources to generate returns for shareholders. Monitoring this ratio and identifying factors influencing its changes can provide insights into the company's financial health and performance.
Peer comparison
Dec 31, 2024